Divisions inside Europe’s centrist coalition risk derailing the Commission’s green simplification package.
BRUSSELS — As she prepares a landmark proposal to slash the European Union’s environmental red tape, European Commission President Ursula von der Leyen is at a crossroads.
Willshe turn to her traditional allies in the center, and opt to protect environmental objectives? Or give way to the more radical deregulation agenda her party is asking for by stepping closer to the far right.
The balancing act is risky — and the deeply divided European Parliament could nuke it all.
On Feb. 26, the Commission will present the first of several ‘omnibus’ bills to simplify the bloc’s green disclosure rules affecting businesses.
It’s one of the first concrete legislative proposals in von der Leyen’s second term as Commission president — and a major test of whether the majority which got her re-elected still holds. The outcome will indicate the ease with which the Commission can implement its overall vision for reviving Europe’seconomy.
A deep rift between the center-left Socialists and Democrats (S&D) and von der Leyen’s own European People’s Party (EPP) — who have governed the EU together from the start — following the Commissioner hearings in autumn has damaged the centrist coalition of parliamentary lawmakers.
Now, the Commission is hoping to find common ground to reach its goal of simplifying EU green regulations to make life easier for businesses.
But so far, the groups disagree on the fundamentals of what the bill should achieve.
“We have been quite clear [that] we want [a] suspension of several legislations,” Tomas Tobé, the EPP’s coordinator for the file, told POLITICO, adding that the aim is to give “a breath for our companies” and shift efforts into boosting competitiveness.
The Socialists, as Tobé noted, are not buying EPP’s plans.
« For now, nobody actually knows what is in this infamous omnibus … It seems to me that the Commission has not yet cleared up its own mind on how to do this,” said René Repasi, head of the German Socialists, who opposes steep deregulation.
Repasi argues the executive has two options: Liaise with Parliament and present a proposal “that can find a majority in the center” or “play games and to come up with a chainsaw proposal which will polarize this house and which will actually lead into unpredictable majorities,” he warned.
His statements echoed almost exactly what other MEPs from the Greens and Renew have told POLITICO, as the three groups have been coordinating positions ahead of the presentation to show a common front to the EPP.
Lighter-touch regulation
The omnibus bill will review EU rules on corporate sustainability reporting (CSRD) and its supply chain transparency rules (known as CSDDD), which force companies to report on the environmental impacts of their activities as well as those of their supply chains. It will also review the EU taxonomy, a classification system which outlines which economic activities are considered green.
With this proposal, von der Leyen is delivering on a promise to reduce reporting burdens for businesses by at least 25 percent in the first half of 2025, and 35 percent for SMEs.
Lawmakers from the S&D, Renew and the Greens have made it clear that their support hinges on von der Leyen making sure that simplification does not threaten the laws’ core objectives: holding companies accountable for any environmental and social damage they do.
But following their electoral victory, the EPP considers itself a kingmaker. If on paper they prefer to work with centrist forces, it won’t be at the expense of their policy objectives.
“Sometimes, yes, there could be another majority and it could be a majority that S&D [is] not happy with,” the EPP’s Tobé said, arguing that S&D is trying to impose their red lines on the EPP. “That is not something that we respect,” he added.
“The first instinct from the Brussels machine in the last decade has been to regulate — and I would say to overregulate — and we need to have a shift,” he said.
Meanwhile, Giorgia Meloni’s right-wing ECR and Viktor Orbán’s Patriots for Europe groups have invited the EPP to team up with them — with whom they have a tight majority if you include Alternative for Germany (AfD) — to scrap the Green Deal altogether. That would mean severing the cordon sanitaire, an implied agreement of moderate parties not to collaborate with the hard and far right.
Now, von der Leyen needs to balance her EPP’s deregulation demands with the reservations of the left in a final text that is digestible by all center forces.
Meanwhile, center-left groups fear the EPP could be tempted to get their way with the far-right, as happened with the watered-down EU’s anti-deforestation regulation, which ultimately fell through.
Temperature taking
On Jan. 21, von der Leyen held a dinner with the leaders of EPP, S&D, Renew, and Greens to touch base on the omnibus proposal, when she vowed to include the four groups in the drafting process, according to three officials who, like others quoted in this story, were granted anonymity to speak of sensitive internal deliberations.
Last week, on Feb. 12, Anthony Whelan, von der Leyen’s digital adviser in charge of the internal market, met with experts in charge of the file from the different political groups in assembly, four Parliament officials told POLITICO.
« The omnibus is the first legislative test of the mandate. Ursula von der Leyen’s proposal must reflect, from the start, the priorities of the majority that elected her, » Pascal Canfin, who leads the centrist Renew group’s work on the omnibus in Parliament, told POLITICO.
Bas Eickhout, co-chair of the Greens, argued that the omnibus is part of a broader investment package, including the Clean Industrial Deal, needed to boost the EU’s industry, for which the EPP will not be able to count on the support of the far right.
“More and more, [the] EPP starts to realize that having fun on [the] one hand with deregulation and then trying to be with the pro-Europeans on other legislation doesn’t work,” he said.
“I have the feeling [that the] EPP at the moment wants to get rid of the whole thing,” Anna Cavazzini, MEP in the Greens group and chair of the internal market affairs committee told POLITICO, adding that so far « there has not been any close coordination with the EPP. »
From his side, Tomas Tobé argued that his focus will be to get the support of S&D and Renew, as he doesn’t have “expectations” from the Greens when it comes to simplification.
He, however, argued that the three groups “need to realize that the political landscape is different,” and come closer to the EPP’s position.
Roman Haider from the far-right Patriots for Europe group told POLITICO, that ultimately, the decision lies with von der Leyen’s political family. “It’s the EPP’s decision — will they go on with the left and damage Europe or will they change that fatal policy and have a majority with us, ” he said.
The president has also been liaising with Council officials and diplomats to make sure capitals are on board with the omnibus bill, and seems to be facing far less resistance on that front.
Von der Leyen “has nothing to fear from the Council, that’s not where the problem is,” a senior EU diplomat told POLITICO, referring to getting MEPs on board as the real challenge for the Commission.
